Canada Pension Plan Investment Board (CPPIB) has become the first pension fund to raise capital via green bonds issue as it seeks to grow its investments in green assets.
CPPIB said the issue of its inaugural green bond will provide additional funding for CPPIB as it increases its holdings in renewables and energy efficient buildings as world demand gradually transitions in favour of such investible assets.
Poul Winslow, a senior managing director and global head of capital markets and factor investing, said: “The issuance of Green Bonds is a logical next step to CPPIB’s investment-focused approach to climate change, and we are pleased to be a pioneer amongst pension funds in this regard.
“The capital raised will help support strong, long-term investments in eligible green assets that position the Fund for continued success.”
CPPIB, which manages the C$356.1bn (€232.5bn) funds of the Canada Pension Plan (CPP), has announced plans over the past year to invest more than C$3bn in the renewable energy sector, as it works to ensure the CPP Fund is well-positioned for the expected global transition to a lower-carbon economy.
Green Bonds were introduced in 2007.
According to the Climate Bonds Initiative, the annual issuance reached a new global record in 2017 as it rose 78% to US$155bn (€131.5bn) from 2016’s adjusted figure of U$87.2bn.
Climate Bonds Initiative expects annual issuance to reach US$250-$300bn in 2018, and increase to $1trn by 2020.